A worker at a fuel station checks a 500 Indian rupee note after filing a vehicle with fuel in Kolkata. Reuters

India's Bombay Stock Exchange Sensex and NSE Nifty extended robust gains on Monday trading, driven by heavy buying in banking and power stocks amid a recovering rupee and strong cues from Asian markets. The 30 share BSE index Sensex rose by nearly 200 points to end at 16,416.84 and 50-share NSE index Nifty went up by 65.25 points, or 1.33 per cent to close at 4,985.65.

Indian markets opened on a positive note Monday as Bombay Stock Exchange Sensex traded at 16,360.34, 142.52 or points 0.90 percent up from the previous close. NSE Nifty was at 4,965.20, up 44.80 points or 0.80 percent, in the morning session.

Markets made substantial gains in the morning trade, aided by strong upward movement in banking, power and capital goods sector stocks. The CNX Midcap index rose by 1 percent and the BSE Smallcap index surged by 0.8 percent. The market breadth is positive with 906 shares advancing against 378 declines on the NSE and with 1,500 gainers against 938 losers in BSE.

State Bank of India shares led the rally with a 2.8 percent increase while private lender ICICI's shares rose by 2.1 percent in the morning trade at Nifty. Axis bank shares were up by 2 percent while other private lenders also went up between 1.5 to 2 percent.

Both SBI and ICICI together accounted for 40 index points on the Sensex.The BSE Bankex was up 1.61 percent while BSE capital goods index rose by 1.46 percent, followed by the power index at 1.45 percent and auto index at 1.28 percent.

Other top Sensex gainers include BHEL (3.07 percent), Tata Power (2.19 percent) and Mahindra & Mahindra (2.01 percent).

Markets extended gains following strong cues from Asian markets. Asian markets rose up as exit poll reports indicated a lead for pro-bailout parties in the Greek election. Five exit poll results released on Saturday had indicated that pro-bailout parties were gaining hold in the general elections.

In the Asian region, Hong Kong's Hang Seng rose by 0.24 percent and Japan's Nikkei went up by 0.02 percent in the morning trade.

The rupee also got stronger and was trading 32 paise higher at Rs 55.05 against the US dollar in early trade on Monday.

However, analysts said that the current trend should not be mistaken as a trend reversal since the gains are mainly due to short covering.

Markets will be stable to positive, but they are likely to top out at 5,100-5,200, said Prashasta Seth, senior vice president, IIFL, NDTV Profit today reported.

Updated at 8:00 AM EST